Trade war? 1930s? Huh.The Real Risks of Trump’s Steel and Aluminum Tariffs
President Trump announced today that his administration would impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, on the grounds that other countries’ trade practices endanger American national security by undermining domestic production. Here’s what you need to know.
The most immediate losers are the industries that rely on steel and aluminum as an input and will face higher prices. That includes some of the nation’s biggest industries: the automobile sector; aerospace; heavy equipment; and construction. In short, the chassis of a Ford, the body of a Caterpillar bulldozer, the wings of a Boeing aircraft, and the steel girders inside a New York skyscraper are all about to get more expensive.
After the president’s announcement, Wall Street quickly reflected this divide: Shares of U.S. Steel and Century Aluminum were each up about 7 percent shortly afterward, while shares of Ford, Caterpillar and Boeing were each down about 3 percent.
The risk comes from the potential ripple effects.
Affected countries may well retaliate by ordering tariffs on American goods, and they could carefully target goods to cause economic or political pain. American exporters — whether they sell passenger airplanes or soybeans — should be nervous about the next shoe to fall. There are few winners in an all-out trade war like one that enveloped the world economy in the 1930s.
Nope, never heard of it. That wasn't what I was thinking of. There was something, though, something about trade and ...
Eh, long article. Can't be bothered reading it all. Oh, well, Japan's doing fine now, so it probably didn't come to anything, right?How U.S. Economic Warfare Provoked Japan’s Attack on Pearl Harbor
In the late nineteenth century, Japan’s economy began to grow and to industrialize rapidly. Because Japan has few natural resources, many of the burgeoning industries had to rely on imported raw materials, such as coal, iron ore or steel scrap, tin, copper, bauxite, rubber, and petroleum. Without access to such imports, many of which came from the United States or from European colonies in southeast Asia, Japan’s industrial economy would have ground to a halt. By engaging in international trade, however, the Japanese had built a moderately advanced industrial economy by 1941.
At the same time, they also built a military-industrial complex to support an increasingly powerful army and navy. These armed forces allowed Japan to project its power into various places in the Pacific and east Asia, including Korea and northern China, much as the United States used its growing industrial might to equip armed forces that projected U.S. power into the Caribbean and Latin America, and even as far away as the Philippine Islands.
When Franklin D. Roosevelt became president in 1933, the U.S. government fell under the control of a man who disliked the Japanese and harbored a romantic affection for the Chinese because, some writers have speculated, Roosevelt’s ancestors had made money in the China trade.
In June 1940, Henry L. Stimson, who had been secretary of war under Taft and secretary of state under Hoover, became secretary of war again. Stimson was a lion of the Anglophile, northeastern upper crust and no friend of the Japanese. In support of the so-called Open Door Policy for China, Stimson favored the use of economic sanctions to obstruct Japan’s advance in Asia. Treasury Secretary Henry Morgenthau and Interior Secretary Harold Ickes vigorously endorsed this policy. Roosevelt hoped that such sanctions would goad the Japanese into making a rash mistake by launching a war against the United States, which would bring in Germany because Japan and Germany were allied.
Accordingly, the Roosevelt administration, while curtly dismissing Japanese diplomatic overtures to harmonize relations, imposed a series of increasingly stringent economic sanctions on Japan. In 1939 the United States terminated the 1911 commercial treaty with Japan. “On July 2, 1940, Roosevelt signed the Export Control Act, authorizing the President to license or prohibit the export of essential defense materials.” Under this authority, “[o]n July 31, exports of aviation motor fuels and lubricants and No. 1 heavy melting iron and steel scrap were restricted.” Next, in a move aimed at Japan, Roosevelt slapped an embargo, effective October 16, “on all exports of scrap iron and steel to destinations other than Britain and the nations of the Western Hemisphere.” Finally, on July 26, 1941, Roosevelt “froze Japanese assets in the United States, thus bringing commercial relations between the nations to an effective end. One week later Roosevelt embargoed the export of such grades of oil as still were in commercial flow to Japan.”
Whoever wrote it didn't half gloss over some stuff with that "These armed forces allowed Japan to project its power into various places in the Pacific and east Asia, including Korea and northern China," line, eh? The whole thing about WW2 starting in 1937 tends to get omitted a lot around here.
"World War Two?! How many have we had?"